Extended warranties are an important business for hardware manufacturers because they can help to improve the customer experience and increase customer loyalty. Extended warranties are also a source of revenues. Extended warranties may be fixed in their fee and duration, or they may be flexible in their fee, duration, or both. Fixed duration extended warranties may require a long-term commitment, but extended warranties that offer More flexibility in coverage duration (e.g., monthly extended warranties, refundable extended warranties, etc.) may attract customers who upgrade their hardware frequently. Flexible duration extended warranties may also attract customers who are uncertain about the timing of their next hardware upgrade or who are uncertain about product reliability. Flexible duration extended warranties can also attract more budget-constrained customers depending on the premium payment schedule.